EVEN as it tries to slow production down, America is still pumping three billion more cubic feet (85m cubic metres) of natural gas a day out of the ground than it can consume. The country has become so awash in the stuff since “fracking” (hydraulic fracturing of gas-bearing shale deposits) began barely five years ago that the price has plummeted from $8 per thousand cubic feet to $2. (A thousand cubic feet of natural gas contains roughly a million BTUs of energy.) Not that long ago, natural gas was a tenth of the price of oil in energy terms; now it is a 50th.

If the natural-gas companies go on producing at the current rate, all the storage reservoirs in America will be full by autumn. With nowhere left to put the stuff, its marginal price will fall to zero. Such a situation is unsustainable.

Extracting natural gas from tightly packed shale deposits costs around $5-6 per thousand cubic feet. Wells have to be sunk thousands of feet underground and then drilled horizontally through the gas-bearing formations for thousands of feet more. A slurry of water, quartz sand and chemical additives has then to be pumped into the well at high pressure, to fracture the shale and open fissures for the trapped gas to escape. And all the waste water has to be pumped back to the surface to be processed and stored, at considerable cost.

At today's spot prices for natural gas, producers are losing money hand over fist. Many could cease to exist as the industry is forced to contract. And consolidate it will. There are so many firms that the top ten producers account for less than half the market between them. The trouble is that fracking is almost too productive for its own good, and there is just too much shale gas out there. Only big companies with deep pockets will survive.

Back in 2000, America had enough accessible natural gas in the ground to provide a little more than 12 years of consumption. But once the country's shale deposits started to be tapped in earnest, reserves leaped to over a century's supply. And because output from existing wells is not tapering off as fast as initially expected, the actual reserves could wind up being double present estimates.

Such a bonanza ought to be a blessing. And one day it will be. But right now finding users to suck up all that excess natural gas is a headache.

With the United States importing more than half its oil (at over $1 billion a day), and transport accounting for two-thirds of the country's oil consumption, logically the biggest single market for natural gas ought to be motorists. If they could be enticed to switch from petrol to compressed natural gas (CNG)—as drivers in Brazil, Iran and Pakistan have done—America would no longer need to depend on foreign oil.

But do not count on it, even though there is much to like about CNG. For one thing, it is the cleanest burning of fossil fuels—producing significantly less carbon dioxide, nitrogen oxides and unburned hydrocarbons than petrol. Because it leaves no carbon deposits inside the engine, wear is reduced to a minimum and oil changes are required less often. At the equivalent of typically $2 a gallon, CNG is half the price Americans pay at the pump for petrol. It is also safer. If its pressurised container is ruptured, CNG does not pool on the ground, but disperses into the air. And with twice the ignition temperature of petrol, it is less likely to catch fire.

So, what is holding CNG back? One reason is that converting petrol engines to run on CNG is expensive. Conversion kits that meet Environmental Protection Agency (EPA) requirements cost anything from $6,000 to $16,000, depending on the vehicle. For another, the pressurised storage tank leaves little space for luggage in the vehicle's boot.

Only one car designed specifically to run on CNG, the Honda Civic GX, is commercially available in the United States. Compared with its petrol-engined LX sibling, the GX has significantly lower power, has similar fuel economy, and has a sticker price that is $7,000 higher. But it is cheaper to refuel. The GX is also squeaky clean, having the least polluting internal-combustion engine in production anywhere. In California, it has the enviable right—like electric vehicles and certain hybrids—to use the car-pool lanes with only the driver aboard.

CNG cars have other drawbacks that similarly plague electric vehicles—including range anxiety. Refuelling stations are few and far between. At the last count, America had little over 1,000 natural-gas stations compared with 120,000 petrol stations. Honda sells a home-refuelling appliance called Phill, which uses the domestic gas supply to recharge the GX's pressurised tank (equivalent to an eight-gallon petrol tank) in 16 hours, to give a typical range of around 200 miles (320km).

Lorries and buses are a much better proposition. Operating on fixed duty cycles and returning to base at the end of the working day, buses, delivery vans and waste-collection vehicles are ideal candidates for CNG. Indeed, the vast majority of America's fleet of 114,000 CNG vehicles are buses and other municipal vehicles.

With diesel even more expensive than petrol, trucking companies have started converting their long-haul fleets to run on CNG. Cummins, a maker of heavy-duty engines, is doing good business with its new natural-gas engine as lorry owners re-equip their fleets to comply with new EPA regulations, starting in 2014, for lower carbon-dioxide emissions.

But none of that is going to happen overnight. Nor will it come anywhere close to mopping up America's excess supply of natural gas. What will, though, are developments afoot in the process and power-generation industries. In both, the switch to cheap shale gas is underway—and represents nothing less than a renaissance in American manufacturing. A typical case is Dow Chemical, which had planned to build a new petrochemicals plant in the Middle East, but is now also constructing one in America, to take advantage of the low cost of natural gas.

In fact, cheap shale gas is giving American chemical companies a competitive edge over foreign rivals. That is because domestic processors use ethane, a natural-gas liquid derived from shale gas, as a feedstock for various chemical products. Foreign competitors rely on naphtha, a more expensive oil-based feedstock. The American Chemistry Council, a trade association, calls shale gas a “game changer” that is rejuvenating industry and bringing jobs back home.

That is all to the good. But your correspondent is convinced that the one thing that will do more than anything else to revitalise America will be to hasten the on-going switch from coal to natural gas for generating electricity.

Right now it costs twice as much to make electricity from dirty coal as it does from clean natural gas—ie, 12 cents or more per kilowatt-hour versus six cents. Yet, coal still accounts for 45% of power generation, compared with 24% from natural gas (plus 20% from nuclear, 6% from hydro, 4% from renewables and 1% from oil). Retire 30% of today's coal-fired capacity and replace it with shale, and the savings would be enough to peg electricity prices for a decade, or even lower them.

This is no pipe dream. By April 2015, power stations throughout the United States will have to meet stringent new requirements for the amount of mercury they can emit. As a result, some 250 coal-fired plants built in the 1950s and later will have to be retired. Replacing them with clean natural-gas capacity will create demand for billions of cubic feet of shale gas. Even though gas prices will most assuredly rise, the savings for the country over the next 30 years—in environmental as well as economic terms—will be enormous.

Correction: We originally wrote that Dow Chemical will be building the plant in America instead of the Middle East. In fact, Dow plans to build both plants. Sorry.